Who’s complacent? Virginia is complacent

My wife and I are the proud (and exhausted) parents of two young sons, and we live in Falls Church, Virginia. Our oldest is “two half” and will be starting a “cooperative” preschool down the street this September. That means we volunteer in his classroom and help run the school—charity auction, field trip transportation, etc.—and in return we save on tuition. It’s a win-win.

Currently, co-oping parents in Virginia must undergo four hours of annual training before they can volunteer in the classroom—basic things like first aid and certain laws relevant to child care. As reported by the Washington Post, however, the Virginia Department of Social Services is considering regulations that would require co-oping parents instead to undergo approximately 30 hours of training—just to help in the classroom a few hours each month, completing daunting tasks like passing out snacks and sweeping the floors.

Here is more from Ilya Shapiro.

Friday assorted links

1. Lagos.

2. “[Low] Rainfall predicts assassinations of Ancient Roman emperors, from 27 BC to 476 AD.

3. Photographer of death: “It is not known whether Hooper ever aided his subjects.”  Warning: those images are tough viewing.

4. Ex post penalty levied on InTrade.

5. Markets in everything? (speculative)

6. John Cochrane review on banking and finance.

7. Yugoslavian concrete brutalism show at MOMA (NYT).

Margaret Thatcher and the size of government

There are those who still believe that the Thatcher government (1979-1990) rolled back the state and cut taxes.  In fact Thatcherism involved an increase in the proportion of national income passing through the state and an increase in the tax burden.  Only income taxes went down, with great publicity — the more hidden taxes increased.  Value Added Tax, a form of purchase tax, was increased and was by comparison with income taxes regressive, though not quite as regressive as the additional taxes which were levied on alcohol and tobacco…the Thatcher government, and indeed subsequent ones, ended up spending more in absolute and even in relative terms on welfare taken overall.

That is from David Edgerton, The Rise and Fall of the British Nation: A Twentieth Century.  Here are my previous posts on the book and on other work by Edgerton.

Surveillance sentences to ponder

One of the surveillance industry’s recent — and much publicised — success stories took place at a pop concert in eastern China. While Jacky Cheung, a Hong Kong pop star (rebranded a “fugitive trapper” by the Chinese media) crooned, cameras were automatically sweeping the audience.  Facial-recognition technology picked out four men accused of crimes — including a ticket scalper and a greengrocer accused of a Rmb110,000 potato scam in 2015. “Smiling as he approached his idol, he did not realise he had already been spotted,” Jiaxing police gloated in a social-media post.


Some of China’s leading facial-recognition players, for example, are now moving into gait recognition. Hanwang Technology was an early entrant in the field: it was forced to rethink its fingerprint-recognition technology when the Sars epidemic of 2005 left people in China terrified of physical contact.  “We can see the human figure and his gait, so if his cap is pulled down [we] can still recognise him,” explains Liu Changping, president of the Beijing-based company. The Chinese authorities already have a decent video database to build on, he adds: “If [someone] was put in prison before, there’s video of him walking around.”

That is from Louis Lucas and Emily Feng from the FT, interesting throughout.

How should the Fed respond to Trump’s comments?

The president tempered his criticism by saying that Chairman Jerome Powell — his own appointee — is a “very good man.” He also stopped short of directly calling on the Fed to stop raising interest rates.

“I’m not thrilled,” he said. “Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time, I’m letting them do what they feel is best.”

Here is the story.

It is probably best for the Fed to simply pretend he did not say this.  Trying to respond simply escalates the dispute and risks a repeat comment.  That said, the Fed may make its future plans concerning interest rates hazier, thereby offering less forward guidance.  That will give Trump less of a target in the short run, and furthermore “the market,” with fuzzier expectations to begin with, won’t be able to estimate whether the Fed was swayed by Trump or not.

In any case, the end result will be a modest increase in economic uncertainty.

I would stress, however, that we do not have a politically independent Fed to begin with.  Such an arrangement is impossible in a democracy, given that current institutional protections for the Fed always can be taken away by Congress and the president.  What we do have is bounds for independence, and those bounds just narrowed, and not for the better.  If I were going to narrow the political independence of the Fed (and I am not advocating this), interest rates are not even the correct variable to choose.  Why not some measure of how much the Fed is aiding the economy in a downturn?  Interest rates may or may not be the most powerful tool there.

The White House itself is trying to pretend the event didn’t happen:

Shortly afterward, the White House issued a statement saying Trump’s comments were merely a “reiteration” of his “long-held positions,” and that his “views on interest rates are well known.”

“Of course the President respects the independence of the Fed,” it said. “He is not interfering with Fed policy decisions.“

And here is another recent remark by Trump, or was it?

Claims about secularization and economic growth

Damian Ruck, the study’s lead researcher in the University of Bristol Medical School: Population Health Sciences, said: “Our findings show that secularisation precedes economic development and not the other way around. However, we suspect the relationship is not directly causal. We noticed that secularisation only leads to economic development when it is accompanied by a greater respect for individual rights.

“Very often secularisation is indeed accompanied by a greater tolerance of homosexuality, abortion, divorce etc. But that isn’t to say that religious countries can’t become prosperous. Religious institutions need to find their own way of modernising and respecting the rights of individuals.”

Alex Bentley from the University of Tennessee, added: “Over the course of the 20th century, changes in importance of religious practices appear to have predicted changes in GDP across the world. This doesn’t necessarily mean that secularisation caused economic development, since both changes could have been caused by some third factor with different time lags, but at least we can rule out economic growth as the cause of secularisation in the past.”

Here is the press release, here is the paper, via Charles Klingman.

Is Trump a Russian plant?

Here is my Bloomberg column on that topic.  Excerpt:

“But if Trump were in Putin’s pocket, why would he be so nice to him in public? Wouldn’t a real KGB pawn keep a proper distance and play a subtler game?”

…Then there is the “hiding in plain sight” theory. If you know you did something wrong, and people are searching everywhere for evidence of it, then you also know they will eventually find it. So you might as well put it somewhere obvious. For one thing, it might take them longer to look in the middle of the room, so to speak. And when they do find the incriminating evidence, you can argue that it can’t be that bad because you never tried to hide it.

But that hypothesis doesn’t work either. Trump’s embrace of Putin hasn’t exactly put people off the scent, for one. And if Robert Mueller’s team does present serious evidence of Trump-Russia collusion, an “I was open about our friendship at that press conference” probably won’t serve as a workable defense.

p.s. probably not.

Thursday assorted links

1. Does legalizing marijuana boost housing values?

2. the subtext covers innovation in Africa.

3. Secret life of an autistic stripper.

4. Why people like exaggerated stories.

5. “They also revealed that the eventual decision about who should leave the cave first was not based on strength, but decided by the boys themselves. It was based on who lived furthest away from the cave and therefore would have the longest cycle back home.”  Link here.

6. Lawn average is over (WSJ).

Mice treat sunk costs as real

From Erica Goode at The New York Times:

In a study published on Thursday in the journal Science, investigators at the University of Minnesota reported that mice and rats were just as likely as humans to be influenced by sunk costs.

The more time they invested in waiting for a reward — in the case of the rodents, flavored pellets; in the case of the humans, entertaining videos — the less likely they were to quit the pursuit before the delay ended.

“Whatever is going on in the humans is also going on in the nonhuman animals,” said A. David Redish, a professor of neuroscience at the University of Minnesota and an author of the study.

Via Michelle Dawson, here is another study with a differing emphasis:

We found that the sunk cost effect was lower in the ASD [autism spectrum disorder] group than in the control group.

Here are previous MR posts on sunk costs.

My Conversation with Vitalik Buterin

Obviously his talents in crypto and programming are well-known, but he is also a first-rate thinker on both economics and what you broadly might call sociology.  You could take away the crypto contributions altogether, and he still would be one of the very smartest people I have met.  Here is the audio and transcript.  The CWT team summarized it as follows:

Tyler sat down with Vitalik to discuss the many things he’s thinking about and working on, including the nascent field of cryptoeconomics, the best analogy for understanding the blockchain, his desire for more social science fiction, why belief in progress is our most useful delusion, best places to visit in time and space, how he picks up languages, why centralization’s not all bad, the best ways to value crypto assets, whether P = NP, and much more.

Here is one excerpt:

COWEN: If you could go back into the distant past for a year, a time and place of your choosing, you have the linguistic skills and immunity against disease to the extent you need it, maybe some money in your pocket, where would you pick to satisfy your own curiosity?

BUTERIN: Where would I pick? To do what? To spend a year there, or . . . ?

COWEN: Spend a year as a “tourist.” You could pick ancient Athens or preconquest Mexico or medieval Russia. It’s a kind of social science fiction, right?

BUTERIN: Yeah, totally. Let’s see. Possibly first year of World War II — obviously, one of those areas that’s close to it but still reasonably safe from it…

Basically, experience more of what human behavior and what collective human behavior would look like once you pushed humans further into extremes, and people aren’t as comfortable as they are today.

I started the whole dialogue with this:

I went back and I reread all of the papers on your home page. I found it quite striking that there were two very important economics results, one based on menu costs associated with the name of Greg Mankiw. Another is a paper on the indeterminacy of monetary equilibrium associated with Fischer Black.

These are famous papers. On your own, you appear to rediscover these results without knowing about the papers at all. So how would you describe how you teach yourself economics?

Highly recommended, whether or not you understand blockchain.  Oh, and there is this:

COWEN: If you had to explain blockchain to a very smart person from 40 years ago, who knew computers but had no idea of crypto, what would be the best short explanation you could give them, basically, for what you do?

BUTERIN: Sure. One of the analogies I keep going back to is this idea of a “world computer.” The idea, basically, is that a blockchain, as a whole, functions like a computer. It has a hard drive, and on that hard drive, it stores what all the accounts are.

It stores what the code of all the smart contracts is, what the memory of all these smart contracts is. It accepts incoming instructions — and these incoming instructions are signed transactions sent by a bunch of different users — and processes them according to a set of rules.

My take on the Statue of Liberty

That is my latest Bloomberg column, here is one bit:

Cleveland described the statue as “keeping watch and ward before the gates of America.” This is not exactly warm rhetoric — the plaque with Emma Lazarus’s poem welcoming the “huddled masses” to America was not added until 1903 — and although Cleveland supported free trade, he opposed Chinese immigrants, as he regarded them as unable to assimilate. The statue was never about fully open borders.

We Americans tend to think of the statue as reflecting the glories of our national ideals, but that’s not necessarily the case. In her forthcoming “Sentinel: The Unlikely Origins of the Statue of Liberty,” Francesca Lidia Viano points out that you might take the torch and aggressive stance of the statue as a warning to people to go back home, or as a declaration that the U.S. itself needs more light. Her valuable book (on which I am relying for much of the history in this column) also notes that the statue represented an expected “spiritual initiation to liberty” before crossing the border, and was seen as such at the time. The ancient Egyptians, Assyrians and Babylonians all regarded border crossing as an important ritual act, associated with “great spiritual changes.” The Statue of Liberty promoted a transformational and indeed partially mystical interpretation of assimilation.

There are other interpretations of the statue’s purported message based on the details of its design. You plausibly can read the statue as a Masonic icon, a homage to the family coat of arms of Bartholdi the sculptor, a hearkening back to the Seven Wonders of the Ancient World, a celebration of Orientalism, Orpheus and Samothracian civilization, and as a monument to the dead of the Revolutionary War. The statue also contained design clues celebrating the now-French city of Colmar (home base for Bartholdi), and threatening revenge against the Germans for taking Colmar in 1871 from the Franco-Prussian war.

And that does not even get us to the main argument.  In the meantime, I would stress what a wonderful and splendid book is Francesca Lidia Viano’s Sentinel: The Unlikely Origins of the Statue of Liberty.  It is entirely gripping, and one of the must-read non-fiction books of this year.

Stripe Press

Stripe partners with hundreds of thousands of the world’s most innovative businesses—organizations that will shape the world of tomorrow. These businesses are the result of many different inputs. Perhaps the most important ingredient is “ideas.”

Stripe Press highlights ideas that we think can be broadly useful. Some books contain entirely new material, some are collections of existing work reimagined, and others are republications of previous works that have remained relevant over time or have renewed relevance today.

Link here.

What did 17th century food taste like?

I didn’t realize until recently that broccoli, Brussels sprouts, cauliflower, kale, cabbage, and collard greens are all technically the same species, Brassica oleracea. The substantial differences between these sub-species are all due to patient intervention by human farmers over millennia. Many of these changes are surprisingly recent. Early versions of cauliflower may have been mentioned by Pliny and medieval Muslim botanists, but as late as 1600, a French author was writing that cauli-fiori “as the Italians call it” was “still rather rare in France.” Likewise, Brussels sprouts don’t appear to have become widely cultivated until the Renaissance.

That is from a longer post by Benjamn Breen at Res Obscura.  And here is his post on when California was the Bear Republic.